China PMI Contracts, Hits 49.6

Perhaps China's economy has started to move toward recession. New purchasing managers index data certainly shows the its manufacturing data has signaled a contraction. The cause may be the collapse of Europe, or perhaps a drop in the consumer demand in the People's Republic.

According to Reuters:

China's factory activity shrank for the first time in seven months in May as new orders fell, a preliminary manufacturing survey showed, entrenching fears that its economic recovery has stalled and that a sharper cooldown may be imminent.The flash HSBC Purchasing Managers' Index (PMI) for May fell to 49.6, slipping under the 50-point level demarcating expansion from contraction for the first since October and sending Asian financial markets sharply lower.The final HSBC PMI stood at 50.4 in April.The lack of vigor in the world's second-biggest economy implies its ability to meet the government's 7.5 percent growth target this year is increasingly difficult, analysts said, albeit it is still possible.

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